Euro Weekly Technical Outlook: EURUSD Rejected by 200-DMA Again

Euro FX-Pairs Technical Analysis

• EURUSD upside looks blocked.
• EURGBP leaves overbought territory.

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The 200-day moving average refuses to yield to any EURUSD uptick and for the third time this year sent the pair lower after being challenged. EURUSD now trades back below the 20- and 50-day moving averages as well and currently trades either side of the 1.1300 line, and area that prompted rebounds over the last 4-5 months. While this area has been broken before, it remains to be seen if EURUSD will move lower again, especially as Wednesday’s high broke a pattern of lower highs for the first time this year, taking one negative technical indicator off the table. A confirmation that the pair are losing downside momentum would be confirmed if the March 7 low at 1.1176 remains in place, sparking a bullish higher low. Horizontal support kicks-in at 1.1232 (February 15) before 1.1215 (November 12, 2018). Initial resistance between 1.1320 and 1.1350.

EURUSD Daily Price Chart (July 2018 – March 22, 2019)

A volatile week for EURGBP, driven by Euro weakness and Brexit news flows. A sharp rally on Wednesday and Thursday was halted by a combination of the 38.2% Fibonacci retracement of this year’s range and to a lesser degree the October 10, 2018 swing-low at 0.8723. The CCI indicator at the bottom of the chart also showed the pair at its most overbought since mid-December 2018. Any further rally will be capped by the Fibonacci level at 0.8718 before the February 14 high and the 200-day moving average come into play around 0.8840. Thursday’s spike high did break the recent set of lower highs and may temper overly bearish sentiment in the short-term. To the downside a break and close below 0.8528 opens the way to a re-test of the 0.8472 multi-month low.

EURGBP Daily Price Chart (July 2018 - March 22, 2019)

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--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

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